Jose W. FernandezAssistant Secretary, Bureau of Economic and Business Affairs

Washington, DC

February 19, 2013

Introduction

Thank you, Joe, for that kind introduction. It’s wonderful to be here. Let me start by giving an especially warm welcome to the Diplomatic Corps and ambassadors. This has been very long in the planning.

I also want to extend a special welcome to our online audience today. We have people tuning in from all around the world, and I look forward to your questions and comments.

Before we begin, I would like to thank our co-hosts, the Foreign Service Institute and the Office of Global Food Security, for all of their help and support in putting together today’s event.

Today’s discussion is about three important goals: defining the problem of postharvest losses; identifying causes; and finding ways to work together toward a solution. I want to cover each of these areas briefly, but I would like to stress that the real experts are the rest of you in the room. I hope that together we can have a real conversation and I hope together we can work toward a sustainable solution to this global problem.

Defining the Problem

As everyone here already knows, feeding the world is only getting harder. By the year 2050, the world population is expected to reach 9 billion people. In looking at how to meeting this challenge, the Food and Agriculture Organization, or FAO, has estimated global demand for food will increase by 60 percent. Food security initiatives often focus on raising productivity through higher yields, crop intensification, and expanded crop acreage. Indeed, there have been advances in genetics and plant breeding that have done much to improve crop efficiency and production, and will help us meet the food production challenge. However, the world also faces limited resources when it comes to limited water, limited energy, and limited land.

One of the surest – and arguably most affordable – ways to feed more people sustainably is to ensure that the food already produced is not lost or wasted between the farm and the table. According to the FAO, roughly one-third of the food produced in the world goes to waste – that’s a staggering 1.3 billion tons every year. There are reports from experts I have met as I traveled around the world who have told me that this number may run even higher.

In many developing countries, waste takes place just after crop harvest, between the field and the market. In sub-Saharan Africa, about 4 billion dollars worth of grain is lost every year. This is more than the total value of food aid sent to the region over the last decade, and 4 billion dollars worth of grain could feed at least 48 million people. Digging down into these numbers reveals further complications. Food is lost along every step along the food production chain from harvest and handling to storage and processing to packing and transportation.

These numbers are staggering. Let’s put them in perspective: a maize small holder farmer in Southeast Asia may lose up to 30 percent of his crop each year to mold, rodents, and insects due to a lack of dry storage equipment. A vegetable farmer in India may lose the same percentage of her crop due to deficiencies in cold storage infrastructure, such as facilities to sort out the food and store it and keep it fresh.

A rice farmer in Vietnam may lose grain at multiple steps between harvest and market. That person may lose a bit at harvest, a bit more at storage, and even more during transportation. Each of these steps may lead to only a small percentage in grain loss. But those losses add up. The rice farmer may be looking at anywhere between 10 and 37 percent in losses by the time the grain reaches the marketplace. That amount of lost grain, for many of the world’s smallholder farmers, makes an immediate impact on the ability to feed and clothe a family, not to mention the ability to invest in technologies or processes that will help reduce such loss the next season.

Despite the numbers that I have just told you about – 10 and 37 percent in losses and 1.3 billion tons in food – we don’t have accurate figures on the levels of postharvest loss do not exist. This is because total losses differ significantly depending on the crop, the region, and the climate, and losses are difficult to capture across the value chain.

In order to address the problem, we must first understand it. How can we improve information collection? How can we introduce new technologies that to reduce post harvest loss in the developing world? How do we develop best practices for smallholder farmers that are effective and sustainable?

Identifying the Causes

Despite the lack of a complete picture on the extent of postharvest losses, we can pinpoint some of the causes of these losses, which range from poor infrastructure to lack of financing. You have farmers in developing countries that often do not have a fast and dependable way to get food to the consumer. You have inefficient transportation due to lack of roads or poor quality transport vehicles that pose numerous challenges for moving fruits, vegetables, and other perishable food from farm to market. In most of the world, in fact, refrigerated vehicles are not available or practical. You have produce that I have often seen moved in open, un-refrigerated trucks, leading to food loss, infestation, and contamination well before it reaches its destination.

Access to processing and storage equipment is also lacking. Unless equipment is manufactured locally, farmers can have a hard time finding what they need in the domestic market. Processing equipment that can dry high protein beans and legumes or turn soy beans into soy milk greatly transforms and extends the life of a product, as well as to increase its value, but is not always available or even affordable to smallholder farmers. In many developing countries, even if equipment is available, without accessible maintenance services and spare parts, this equipment may not be useful long-term.

On the financing side, and underlying some of the challenges I have already described is smallholder farmers and cooperatives’ lack of access to credit. Many of the technologies needed to address postharvest loss are not expensive, but, in fact, they do require financing. They do require credit. If farmers are not able to invest in adequate drying and/or storage equipment, their ability to potentially reduce postharvest loss will be limited. The value of those losses prevents farmers from saving enough capital to invest in adequate storage equipment, creating a vicious cycle.

So those are some of the causes. The question now is what we do about it.

Working Toward A Solution

Despite the enormous challenges that postharvest losses present, governments, private sector, and civil society are all cooperating to work toward a solution. On the government side, the United States is taking a comprehensive approach to help countries solve some of the problems I’ve just described through development and commercial initiatives. We start with Feed the Future, the U.S. government’s flagship initiative to reduce global hunger and poverty. By promoting collaboration at the U.S. domestic and international levels, focusing on smallholder farmers – particularly women, engaging with the private sector and civil society in a meaningful way, and trying to advance big ideas through research and innovation, Feed the Future supports partner countries in developing their agriculture sectors to spur broad-based economic growth and improve nutrition. The initiative includes programs to reduce post-harvest losses by improving management of stored foods through better technology and processing techniques, supporting basic market infrastructure, and introducing risk management tools such as crop insurance.

We have a number of projects. One of them that I am very proud of is in Rwanda, where postharvest losses for beans and maize are estimated to be as high as 30 percent, Feed the Future, along with public and private sector partners, helped establish a 3,000 megaton storage facility to benefit more than 10,000 smallholder farmers. Feed the Future has also invested in training and support programs that encourage farmers to adopt best practices for postharvest handling and storage. This type of human and institutional capacity development is particularly important because it helps to ensure that our efforts will be sustainable in the long-term.

In the private sector arena, innovators and entrepreneurs throughout the world are developing new technologies to reduce postharvest loss. In India, where up to 18 percent of all produce is lost to spoilage each year due to inadequate cold chain storage systems, former Secretary Clinton awarded the first grant of a joint Science &Technology Endowment Fund to a U.S. – Indian partnership to commercialize solar-powered refrigerated storage vehicles.

Companies such as GrainPro, and you’ll hear from them this morning, are providing equipment to farmers, co-ops, and small businesses, substantially reducing postharvest losses and increasing farmer incomes.

We have multinational corporations that have also made tremendous strides in addressing food security from a systemic approach through the establishment of the Archer Daniels Midland Institute for the Prevention of Postharvest Loss, and another one is an investment by Land O’Lakes in partnership with USAID to help dairy cooperatives in Uganda become more competitive through vertical integration.

Solving the challenge of postharvest loss requires investment and it requires scaling up of technologies as well as an understanding of complex food production systems. And this is where American businesses excel: at identifying such problems and finding affordable and sustainable solutions. Responsible business practices have already contributed to food security by improving consumer access to safe, nutritious, and affordable food. Again this is an instance of doing well by doing good and may hold the key to feeding our growing population in the decades to come.

And of course, civil society has a significant role to play. In September of last year, on the margins of the U.N. General Assembly, former Secretary Clinton announced a $1 billion dollar pledge of private, non-governmental funds from InterAction, an alliance of U.S. based civil society organizations for investments in food security over the next three years. A number of representatives of civil society that are making significant contributions to improve food security and nutrition are in the audience today.

And again we look forward to having a conversation and working together today.

Conclusion

If there’s one thing we’ve learned after decades of work, it’s that there is no silver bullet solution. We all must do our part in tackling the blight of lost and wasted food, and breaking the cycle of hunger. Public-private partnerships that include NGOs and businesses, government initiatives, and international organizations are already working together to improve access to safe, nutritious, and affordable food. But we’ve got to do more. We simply cannot afford to squander 1.3 billion tons of food a year when hundreds of millions of people around the world are not getting enough to eat.

As I said at the outset, we are all in this together. We have invited government, civil society, NGOs to work on this. So I ask you again to take advantage of this unique group being together, take advantage of the breaks, and get to know each other. Our job has been to bring those of you with shared interests and shared goals together, but our hope is that today will be an opportunity for you to share ideas and make lasting connections.